Chinese regulators investigate foreign chipmakers

Yuan Yang and Bryan Harris
Samsung Electronics Co.'s 1GB Double-Data-Rate (DDR) modules with memory chips.
SeongJoon Cho | Bloomberg | Getty Images

Chinese regulators have opened investigations into several foreign memory chip makers following a surge in prices that has attracted government concern.

Samsung, the Korean electronics company, said in a statement on Monday that investigators from the State Administration for Market Regulation had visited its Chinese sales offices at the end of last month. The company was "co-operating with Chinese authorities", it said.

Micron, the US memory chip giant, told Reuters on Friday that it had also been visited by SAMR. Micron could not be reached for comment. Fresh investigations were first reported by The Wall Street Journal on Monday.

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China is seeking to become self-sufficient in memory chips, which are an essential component in everything from smartphones to web servers. But the market in DRAM chips, a major form of memory chip, is highly concentrated in three non-Chinese producers — South Korea's Samsung and SK Hynix, and the US's Micron.

State media reported last December that regulators had approached Samsung over rising prices.

China Daily, a state media mouthpiece, at the time quoted Xu Xinyu, an official with the Pricing Supervision Department of the National Development and Reform Commission, saying: "We have noticed the price surge and will pay more attention to future problems that may be caused by 'price fixing' in the sector."

Dan Wang, technology analyst at consultancy Gavekal Dragonomics in Hong Kong, suggested that Beijing may now be negotiating prices with the three companies, adding: "Memory prices have significantly risen in the last two years. China imports more semiconductors than crude oil by value, and the government is not happy about the price increases."

The Trump administration's ban on Chinese telecoms company ZTE buying supplies from the US, including semiconductors, has made the health of China's domestic chip industry an important consideration in trade tensions. At the same time, regulatory approval for US chip giant Qualcomm's proposed merger with NXP is said to be nearing the finish line but no official deadline has been announced by Beijing.

Regulators did not immediately respond to a request for comment.

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